Ban on Brand Names For Drugs – Boon or Bane?

by buildingpharmabrands

Today’s news in the Times of India that Health ministry pushes for end to sale of branded drugs is indeed shocking. History repeats itself. This is not the first time that the government of India contemplated this so-called ban on brand-name drugs. Thirty-two years ago, in 1980 the government to abolish the brand names for all single-ingredient drugs. They are including all FDCs (Fixed-Dose-Combinations) also in the ban this time around. The Pharmaceutical Industry, mainly led by the multi-national companies contested this decision by filing a petition in the Delhi High Court, which had quashed the ban as unconstitutional.

Consider the speech delivered by Mr. S.V. Pillai at the Annual General Meeting of Pfizer India Limited in 1981, on the brand name issue gives useful insights, a clear picture making a strong case for brand names in the pharmaceutical industry. Brand names usually have no similarity in spelling or pronunciation.

  1. The use of brand name is simpler: Di-hydro-ergotamine methane sulphonate is the generic name of the drug marketed under the brand name Dihydergot. Another jawbreaking, tongue-twisting, generic name is xylometazoline hydrochloride. It is available under the brand name Otrivin.
  2. Confusion exists between generic names: Quinidine sulphate is the generic name of a cardiac drug. It can easily be confused with the anti-malarial quinine sulphate.
  3. Efficiency: Generic equivalence is not the same as therapeutic equivalence. PIllai said, “Although such a product (generic equivalent) may contain the basic chemicals needed to fight your illness, evidence shows that often there is a real question about the potency of this ingredient, the way it has been combined with other substances, whether it dissolves satisfactorily and whether it is stable etc.,” Its uses will determine how much of the drug is absorbed and how rapidly it is assimilated. Other important considerations are the side effects of the drug and tolerance by the patients.
  4. Reputation of the company, Quality Assurance: When a company sells a product under a brand name, it is staking its reputation on the brand. This is a less expensive way of ensuring quality than administrative controls, according to a communist sociologist from Poland. Before a brand is cleared for marketing there are extensive clinical trials undertaken by the company concerned.The better companies maintain a ‘post-launch’ reporting system; a panel of doctors keeps them informed about the brand’s performance when it is administered to patients. Any possible adverse effects can be detected in this manner. In a generic system this safeguard is not available at all.
  5. Margins rather than quality: The doctor prescribes the drug by generic name and the patient takes it to the drug store. The dealer is likely to sell him the product from which he earns the highest trade discount. The doctors’ prescription freedom and right are taken away. The dealer plays a far more important role in the sense that it is he who ‘chooses’ finally (some may say the doctor can insist on the company when he prescribes). The competition will no longer be on the basis of therapeutic efficiency but on the basis of the margins one can provide to the middle man. Quality is bound to suffer and the loss will b the consumers’. At the same time, the consumer is not going to enjoy the price benefit either. In India price controls apply not only to branded drugs but also to generics. And the cost of promotion will not be reduced. Only the emphasis is shifted to the middle man from the doctor. So any assumption that the abolition of brand names will bring down the prices is unfounded.
  6. Disincentives to R&D: The denial of the trademark protection to a drug will destroy the incentive for drug houses to develop new medicines. The cost of developing a new drug is very high and runs into millions of rupees. The discovery of an active ingredient is not enough. This will have to be followed up by toxicity trials; experiments on animals are followed by expensive and time-consuming clinical trials. What is that the company is left with, at the end of all this effort and expense, if it cannot have the brand system to protect its interests? Very few new drugs have been developed in India; the introduction in India of the new drugs discovered abroad has slowed down after the government adopted a policy of disincentives.
  7. Trader benefits: Whom does the abolition of brand name benefit? Not the doctor. Since generic equivalence is not the same as therapeutic equivalence, it prevents him from giving his patients the best professional advice he can. It is also inconvenient. The Sainsbury Committee in the U.K. had proposed a ban on brand names for new drugs, but the Labor government rejected the proposal. Soviet Russia, which in the beginning used only generic names for drugs, has since the mid-1960’s encouraged pharmaceutical companies to identify their products. In export markets Soviet Russia is offering products under brand names and it buys drugs from other countries including India by brand name. In other countries like Bulgaria, Poland, Hungary and Yugoslavia where the pharmaceutical industry has developed fast, brand names are extensively used for drugs. The only country, which made a bold experiment abolishing brand names for drugs is Pakistan. The generic scheme introduced in 1972 was a disastrous failure. It encouraged mushroom growth of drug units and the market was flooded with substandard, spurious medicines, which were not cheaper than branded drugs. The scheme was therefore, scrapped under the 1976 Drugs Act.

Need we say more in defense of brand names for drugs?